EU Instant Payments Evolution: I expect the EU regulations around instant payments to have an impact, but that impact will differ depending on the specific country within the union, particularly in countries where there is a pricing differential or with a low adoption rate. We’ve done regression analysis and have found a direct correlation between reachability and accessibility. Once you reach about 93% or 94% accessibility in a country, usage takes off. The other key with the key correlation here is pricing. We've seen time and time again across many countries, that if the price of a payment service to the consumer increases, demand will decrease and vice versa. So, this is exactly what the commission has taken aim at with this regulation. It aims to increase usage while managing the pricing for the service. That will have a collective impact, especially in countries where instant payments have low adoption rates, like Germany and Austria.
Swift Gets Wise: The recent announcement with the Wise cross-border platform is a real watershed moment for the industry. If you missed it, financial institutions seeking will be able to route Swift payment messages directly to Wise Platform through its latest Correspondent Services solution. This routing will enable their customers to benefit from the speed and convenience of Wise and the breadth of Swift without needing to implement any major changes to their systems. We have the leading cross-border payments infrastructure announcing an alliance with a leading fintech to help banks innovate on cross-border payments, which they often can't do directly. There are other initiatives like that with other national market infrastructures, like the announcement a couple of years ago between the European Banking Authority (EBA) clearing and The Clearing House for the US. It’s all about the regionalization of cross-border payments and creating regional payment infrastructures that will support the flow of payments across highly important trade corridors.
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Leo Lipis
Leo is the founder of Lipis Advisors and has over 25 years of experience in payment systems consulting and research on all six continents. Prior to founding Lipis Advisors in 2007, he held positions in payments strategy and analysis with commercial banks, clearing houses, and central banks. Leo works chiefly in transaction banking, payment system strategy & design, and treasury management.